Salient to Investors:

Tim Worstall at the Adam Smith Institute writes:

  • Jeremy Grantham is horribly mistaken when he talks about drastically reducing the use of phosphorus and potassium in the next 20–40 years else they run out and we begin to starve. Grantham is looking at mine reserves as if they’re the total amount of the elements available to us – the known knowns. His are the deposits that we know where they are, have drilled and tested them, we know how to extract and process them using current technology and we also know that we can make a profit doing so.
  • The fact that every generation runs out of mineral reserves has been true since we started mining. Drilling and sampling is expensive, so we only do this with the stuff we’re likely to dig up in the next few decades. Thus, ore reserves are, at any one time, good for only a few decades of use.
  • Resources is a very different number. This is a combination of the known unknowns and the unknown knowns. The known unknowns are more generally known as resources, just not converted to reserves yet. The unknown knowns are that there are lots of resources out there but just we don’t know where, in what quantities, and how we’d get it out.
  • The unknown unknowns is that other minerals contain elements in some quantity but we’ve just never bothered to check.
  • Estimated world resources of potash total about 250 billion tons – at current usage rates an over 7,000 year supply. World resources of phosphate rock are more than 300 billion tons, or a 1,500 years supply. And this is before we get onto the unknown unknowns.

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